Private Contracts Between Parties For Appointment Of Arbitrator Different From Statutory Appointment Of Arbitrators: Allahabad High Court

Recently, the Allahabad High Court has held that cases where appointment of arbitrators is through contracts which contemplate such appointment and statutory appointment of arbitrators are two separate classes to cases and the same are distinguishable on facts.

National Highways Authority of India approached the High Court against order of the Additional District Judge, POCSO Act, Bijnor under Section 34 of the Arbitration and Conciliation Act, 1996 whereby it was held that the compensation granted to the respondent was not in accordance with law.

Counsel for NHAI relied on the decision of Supreme Court in Kinnari Mullick and another v. Ghanshyam Das Damani to argue that the Additional District Judge did not have the power to remand the case back to the arbitrator.

Per contra, counsel for respondent relied on the judgment of Supreme Court in National Highways Authority of India v. P. Nagaraju alias Cheluvaiah and another to argue that the remand was well within the jurisdiction of the Additional District Judge.

The Court observed that in Kinnari Mullick the contract was a private contract between the parties where arbitrator was appointed pursuant to the contract, whereas in P. Nagaraju a statutory arbitrator had been appointed where remand to the arbitrator was upheld.

“Private contracts between parties which contemplate the appointment of an arbitrator and the cases where the statutory arbitrators are appointed under the statute fall in two separate classes,” held Justice Ajay Bhanot.

Accordingly, the Court upheld the order of the Additional District Judge remanding the case back to the arbitrator.

Case Title: National Highways Authority Of India v. Dwarikesh Sugar Industries Limited And Another [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 423 of 2024]

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